The Affordable Care Act and Military Veterans

(Mahalo nui loa to alert reader “Ben” for providing the resources and links to this post!)

Americans are concerned about the Patient Protection and Affordable Care Act. Those of us with military experience and heading toward financial independence are even more concerned about military benefits. How will the ACA affect military servicemembers, veterans, and retirees? Will Tricare still be around? Will expenses go up? What’s next?

Believe it or not, the ACA has already done some good things for Tricare and veterans. However there’s legitimate concern (assuming the ACA works as intended) that DoD will attempt to modify Tricare benefits or even shift over to an ACA system.

In 2011 there were over 24 million living U.S. military veterans who served for less than 18 years (many of whom were drafted), and over five million of them used VA healthcare services during the year. (That link downloads a PDF study.) Depending on the studies and surveys you read, 1-2 million of these military veterans currently have no health insurance (even though they could be eligible for VA services). Another 14 million people in 2011 were active duty, retired military, or family members. The DoD and the VA spent $104 billion providing health insurance for these 14 million, which was over 10% of all federal health spending (the rest of the federal expenses were mostly Medicare & Medicaid).. The cost of the DoD and VA programs has grown by 7.9% annual inflation over the last decade, which is about the same inflation rate as all federal healthcare expenses.

DoD and the VA have become one of America’s larger healthcare companies, and their actuaries know that this math is not sustainable. The military’s accountants are trying to figure out how to pay for the next war, not the last one, and $104 billion will solve quite a few logistics problems. Unfortunately during budget negotiations it’s all too easy to forget the debt that the nation owes to its veterans. If the ACA can hold down costs or even improve the DoD and VA healthcare programs then the legislation is directly helping veterans.

The first question is usually whether anyone in the military has to do anything to comply with the ACA. Part of the legislation requires everyone (and their family members) to have “minimum essential healthcare coverage” or else they’ll pay penalties on their tax returns.

The good news is that anyone who’s eligible for any military health insurance is already complying with the ACA. When Congress passed the ACA legislation, Tricare was specifically exempted from its requirements. Tricare health insurance programs, VA insurance programs (like CHAMPVA), and VA healthcare all qualify as minimum essential healthcare coverage.

There’s one last reason for a veteran to have the VA do an eligibility determination. If you’re eligible for any level of VA care, whether it’s high-priority or low-priority, you’re no longer eligible for ACA exchange subsidies. You can still buy insurance from the exchange (like a supplemental policy) but you’d pay the exchange price without a subsidy. The problem is that a veteran with a VA low-priority rating may not be able to get an appointment at the VA clinic and would have to use their exchange health insurance. If there’s any consolation, it’s that a veteran with an income level that results in a low-priority VA classification may also mean that the veteran’s income would be too high for an exchange subsidy.

Veterans with family members (who are not eligible for VA care) would be able to buy their own exchange policy and would get a subsidy if their income levels met the requirements.

Elderly will benefit from the ACA’s emphasis on providing more outpatient care (outside of hospitals and skilled nursing facilities), and the VA is already jumping on this trend. The VA treats over six million patients per year, and more than half of them are older than age 65. (Nearly a third are over age 75.) Institutional care is horrifically expensive, but new medtech devices (touch-screen tablets and wireless medical devices) are finally ready for prime time. If an elder is dealing with cardiac issues, the simple acts of monitoring blood pressure and weight used to require visiting a clinic several times per week. Now families can accomplish the same standard of care at home with a wireless blood pressure cuff, a WiFi weight scale, and a tablet linked to a website run by the doctor’s office. That’s just one aspect of the VA’s “Program at Home” healthcare video showing their efforts to provide more outpatient care to the elderly.

Whose elderly? Well, this might apply to your elders. If you have a parent or other elder family member who served, they may have been eligible for some VA benefits all along. That’s even more likely if they were exposed to hazardous substances like nuclear testing programs or Agent Orange or Gulf War Syndrome. As the delayed symptoms of those exposures begin to emerge, they may be eligible for many more VA benefits than they realize.

I’m starting to see it among neighbors & friends. I had a conversation last week with a Vietnam veteran in his 70s who’s now struggling with congestive heart failure. He’s had open-heart surgery and several stents, but he’s a tough guy. It never occurred to him that his cardiac issues might have been caused by Agent Orange, but his cardiologist made the connection and now a whole world of VA benefits has opened up to him– including home care that would formerly have required many visits to the doctor’s office.

The penalties of the Affordable Care Act do not apply to servicemembers, retirees, and their families. They do not apply to veterans who qualify for VA benefits. However the ACA is already improving military healthcare benefits, and it may relieve DoD and the VA of the financial burden of healthcare inflation.

Doug – remote monitoring of chronic diseases as well as providing healthcare access to remote areas is one of the areas in which the VA is a world leader, however, most other healthcare organizations have not quite gotten as far as the VA so I would quibble a bit with the ‘ready for primetime’ comment. Big issue in the non-government subsidized healthcare world is who pays and how much for remote monitoring. Also, most world studies haven’t proven a large and clear benefit over the traditional approach for healthcare delivery…it’s getting there, but a few years more are needed to iron out some kinks Governments are addressing the regulatory, licensing and reimbursement aspects. Large object in the way in the US is ACA and HITECH…..remote monitoring is one of the last things on their radar for accomplishing.

And if that was too much info – feel free to jettison into the round file 🙂

Thanks, Deserat! I don’t think people expect to read “VA” and “world leader” in the same sentence!

I’ve seen the system shown in the video in use here in Hawaii: http://ihealthhome.net/our-system/ It works so well that the company is making a profit (and I’m a small investor). However it is not yet “plug and play” and the company has not acquired a national partner– although their system is eligible for Medicare reimbursement.

You’re right about the patient benefit– it seems to be the same with either traditional practices or at home care. I think the largest benefit is for the caregiver, whether that’s the family or the nursing staff who aren’t driving patients to appointments or driving all over the service area. The uncertainty around implementing ACA has been holding it back for several years, too. I feel like I’m watching the launch of the Apple II computer all over again…